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Diamond Apples are a Black Market Item (BMI) that is no longer sold due to glitches that it was causing for the game. This BMI allowed the user to select any coat for their horse, while keeping the same body style. For example a Fresian, which are normally all black, could have a white or paint coat. While the actual BMI is no longer sold you can still obtain a horse with a Diamond Apple in the sales for a resonable price.